Correlation Between WisdomTree Managed and ProShares VIX
Can any of the company-specific risk be diversified away by investing in both WisdomTree Managed and ProShares VIX at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining WisdomTree Managed and ProShares VIX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Managed Futures and ProShares VIX Mid Term, you can compare the effects of market volatilities on WisdomTree Managed and ProShares VIX and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in WisdomTree Managed with a short position of ProShares VIX. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Managed and ProShares VIX.
Diversification Opportunities for WisdomTree Managed and ProShares VIX
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WisdomTree and ProShares is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Managed Futures and ProShares VIX Mid Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares VIX Mid and WisdomTree Managed is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on WisdomTree Managed Futures are associated (or correlated) with ProShares VIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares VIX Mid has no effect on the direction of WisdomTree Managed i.e., WisdomTree Managed and ProShares VIX go up and down completely randomly.
Pair Corralation between WisdomTree Managed and ProShares VIX
Given the investment horizon of 90 days WisdomTree Managed Futures is expected to generate 0.25 times more return on investment than ProShares VIX. However, WisdomTree Managed Futures is 4.06 times less risky than ProShares VIX. It trades about 0.06 of its potential returns per unit of risk. ProShares VIX Mid Term is currently generating about -0.04 per unit of risk. If you would invest 2,991 in WisdomTree Managed Futures on November 19, 2024 and sell it today you would earn a total of 519.00 from holding WisdomTree Managed Futures or generate 17.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Managed Futures vs. ProShares VIX Mid Term
Performance |
| Timeline |
| WisdomTree Managed |
| ProShares VIX Mid |
WisdomTree Managed and ProShares VIX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Managed and ProShares VIX
The main advantage of trading using opposite WisdomTree Managed and ProShares VIX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Managed position performs unexpectedly, ProShares VIX can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ProShares VIX will offset losses from the drop in ProShares VIX's long position.| WisdomTree Managed vs. First Trust Managed | WisdomTree Managed vs. iMGP DBi Managed | WisdomTree Managed vs. First Trust LongShort | WisdomTree Managed vs. WisdomTree CBOE SP |
| ProShares VIX vs. iPath Series B | ProShares VIX vs. ProShares VIX Short Term | ProShares VIX vs. ProShares Short VIX | ProShares VIX vs. ProShares Ultra 20 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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